Darrell Johnson, Chief Executive Officer is the Orange County Transportation Authority
Run government like a business. This concept gets plenty of play wherever you turn – from editorial pages to online bloggers and from elected officials to those who are looking to unseat them. It’s no secret why this idea resonates so well. There are millions of men and women in this country who go to work day in and day out to earn a living. And then each of them turns over a piece of their paycheck to the government for services like running schools, delivering water, fighting fires and at agency’s like ours, providing bus and train service and building highways and streets.
As a taxpayer, I want to know that government is making the most efficient use of the dollars that are pulled from my paycheck every two weeks. As the chief executive of the Orange County Transportation Authority, I want you to know that spending your tax dollars wisely is a primary factor in each and every decision we make.
Our agency took one more step in that direction this week when the board of directors voted unanimously to have OCTA’s administrative employees pay 100 percent of the employee share of their pensions. OCTA has been paying an average of 8 percent for each these employees’ share of their pension costs. OCTA’s 1,100 union-represented coach operators, maintenance workers, facilities technicians and parts clerks already contributed 100 percent of the employee share.
Beginning Jan. 1, 2014, administrative employees will contribute an average of 2 percent of their salaries to their pensions. That contribution will increase each year until employees are paying 100 percent of their employee share by Jan. 1, 2017. Phasing in this implementation is the right thing to do for our employees and will help minimize the impact to them while looking to the long-term financial sustainability of our agency.
This progressive plan will result in an $8.2 million savings to taxpayers over the three-year period. During the next 20 years, employees paying their own pension share is expected to result in a savings of $85 million.
OCTA’s nearly 450 administrative employees belong to the Orange County Employees Retirement System and the overwhelming majority – 96 percent – has a retirement formula of 1.67 percent at the age of 57.5. This is one of the lowest pension formulas in the state.
In the era of shrinking budgets and belt tightening, OCTA continues to lead as an innovative and nimble government agency. Our organizational structure mirrors that of the private sector. Administrative employees serve at-will and are not members of a union. We have a merit-based pay-for-performance model where employees only receive raises if they achieve clearly defined goals and objectives. In response to the Great Recession, from mid 2009 through 2012 employees received no merit-based pay raises, nor did they receive any cost-of-living or “step” adjustments – we simply do not do that.
There are no automatic increases or promotions and OCTA does not pay for employee medical care after retirement.
Clearly, operating a public agency with a business mindset is a benefit to our taxpayers. The services we provide however are unlike the private sector. Improving transportation in Orange County is not motivated by profit but to ensure Orange County remains a place where those private businesses, their employees and their families can thrive.